The new industrial revolution will change everything

by Fabius Maximus

Summary: Industrial revolutions reshaped the world. But during the long pause of tech progress since WWII, we forgot what they do to society. Here is a reminder. A timely one, since a new revolution has begun.

“For the world is changing: I feel it in the water, I feel it in the earth, and I smell it in the air.”
— Treebeard the Ent in Tolkien’s The Return of the King.

4th Industrial Revolution - Dreamstime-115705787
Photo 115705787 © Ievgeniia Ocheretna – Dreamstime.

Technological progress slowed so much after WWII that we no longer remember what rapid change looks like. Compare two lives to see what it was like.

Bat Masterson was born on a farm in 1853, amidst people living hard lives with only simple machines. Women drew water from wells, making them old before their times. He became a gunfighter in the tech boom known as the Wild West. He was a sportswriter for the New York Morning Telegraph when he died in 1921 – in a city of cars, telephones, electricity, and a powerful public health infrastructure. If we transported his mother through the Time Tunnel from her 1853 home to his 1921 home, how quickly could she adapt? Everything would be different, with a thousand advances beyond her imagination.

June Cleaver was a mother in the 1957 sitcom “Leave it to Beaver.” If we transported her to a suburban home in 2020, how quickly could she adapt? She would look at the oven, frig, TV, telephone, lights, furnace – all familiar devices. She would be impressed with air conditioning and microwave ovens in a home, but she was familiar with this technology. She would be impressed with our computers, cell phones, rockets, and birth control pills – but all of those were seen in 1957 as likely future tech.

Another example: imagine if we shifted General Pershing one hundred years into the future – from 1918 WWI to command a modern Army division. He would recognize all the major “new” tools: aircraft (fighters and bombers), submarines, rockets, radio, and tanks. But if we shifted the Duke of Wellington from the Battle of Waterloo (1815) to WWI (1917), the Duke would be lost amidst the new tech.

The specific dates of the previous industrial revolution are arbitrary, depending on whether one looks at the laboratory breakthroughs or when engineers build them. Whatever the dates, it reshaped the world.

“The Singularity has happened; we call it ‘the industrial revolution’ or ‘the long nineteenth century.’ It was over by the close of 1918. Exponential yet basically unpredictable growth of technology, rendering long-term extrapolation impossible (even when attempted by geniuses) Check. Massive, profoundly dis-orienting transformation in the life of humanity, extending to our ecology, mentality and social organization? Check. Annihilation of the age-old constraints of space and time? Check.”

— “The Singularity in Our Past Light-Cone” by Cosma Shalizi (Assoc. Prof of Statistics at Carnegie Mellon).

The revolution gave per capita GDP in the developed nations a boost that lasted through the 1960s. But few noticed its ending. In the 1960s, people believed in a future of rapid technological progress. But all we got was the manned space program (an expensive trip to nowhere) and the supersonic transport (a premature technology) – and radical changes in the narrow fields of communications and computing. So technological progress slowed, as did economic growth.

Now a new revolution might have begun.

Future Industry

What comes next?

The most obvious wave coming is more automation from the combination of semi-intelligent machines, better algorithms, improved cheap sensors, and better manipulators.

Algorithms have already changed the workplace. In the days of yore, for example, every bank had credit officers who personally approved each loan; now algorithms do so faster, better, and cheaper for most consumer loans and mortgages.

As the revolution begins, we have credit cards with chips (replacement for cash), self-driving cars with Star Trek-like sensors and computers, retail kiosks, and facial recognition systems. All have the ability to reshape the workplace. For example, fast-food ordering kiosks provide faster and cheaper service – and customers prefer them.

An industrial revolution differs from the narrow advances in the past few generations by its breath. Drones, solar power, gigabyte broadband, smart machines, 3-D printing, re-usable spaceships – these and a host of other new technologies are already reshaping our world.

Coming are far greater advances, such as guard robots, computer-generated actors and models, sexbots, and wonders as yet seen only in science fiction tales. They will have a Richter 10 impact on society.

“{The arrival of sexbots} will blow up the world. It will make crack cocaine look like decaffeinated coffee.”
— Anonymous (source here).

The pace of progress appears to be accelerating towards greater breakthrough technologies. Here are three candidates from a long list. Only a few need succeed to change everything.

Problems from progress

All this is great news for our descendants, as we move to the wonderful world predicted by Lord Keynes in 1930. Revolutions do not solve problems so much as make them irrelevant. But rapid growth creates its own problems. Look at 1880’s London in this slightly altered quotation from William Manchester’s biography The Last Lion: Winston Spencer Churchill, Visions of Glory.

“The city itself is overwhelmed, engulfed by changes with which it has not learned to cope, and which are scarcely understood. Some were inherent in the trebling of the population, some consequences of industrialization. Particles of grime from the factory smokestacks produce impenetrable smog which reduces visibility to a few feet. …

“Much of the city stinks. The city’s sewage system is at best inadequate and in the poorer of neighborhoods nonexistent. Buildings elsewhere are often constructed over cesspools which, however, have grown so vast that they form ponds, surrounding homes with moats of effluvia. …

“And the narrow, twisted streets are neither sealed nor asphalted. People lock their windows, even in summer, but they have a lot to keep out: odors, dust. …”

And then there was the manure from the horses (in 1880, NYC had 180 thousand) Nobody saw this coming, and so people had to react instead of prepare. Let’s do better this time.

Among the biggest economic disruptions will be from big companies unable to ride these waves. Such as Xerox – who dominated the copier business and invented most of the key elements of personal computing. Such as Kodak – inventor of the digital camera (1975) and organic LEDs (1987), the one-time leader in digital radiography and blood testing equipment (history here). Such as GE – whose serial screw-ups are legion (e.g., see  “Fast Heat: How Korea Won the Microwave War” by Ira C. Magaziner and Mark Patinkin in the Harvard Business Review, January-February 1989).

The social and political problems from an industrial revolution will be even more difficult for investors to manage. Two can be foreseen. First, the struggle to share the fruits of increased productivity between labor and owners. This can be solved with a little wisdom, but often a little wisdom is more than a people have on tape. Failure at this could make burying gold in the backyard a winning strategy.

Second, coping with widespread unemployment. Many remain in denial about this. In their 2004 book, The New Division of Labor: How Computers Are Creating the Next Job Market, Frank Levy and Richard Murnane discuss fields where “computerization should have little effect on the percentage of the workforce engaged in these tasks.” They list truck driving as one such field. Only 16 years later that prediction looks foolish. Imagine what another 16 years will bring. Discussing the coming job apocalypse is beyond the scope of this article. I will write about it if there is any demand.

So far we prepare for these things by closing our eyes. I doubt that will prove successful, and it squanders our lead time.

Conclusions

Risk and reward. Greed and fear. Booms and busts. Industrial revolutions do not change their natures, but make all of these larger. Understanding the economic regime of our time can inform your decision-making in all aspects of life. Understanding the nature of our time brings two other large advantages. First, industrial revolutions are wonderful. Awareness of this big picture is an antidote to the doomsters who can eat away like termites at people’s confidence in the future. Second, awareness of this big picture can help fight the disorientation brought about by rapid change – the foe of clear decision-making.

Just as the date is vague when the previous revolution began, so will the start of the next one. There are no milestones for such things. But if you look for it, you will see the signals.